The Council, made up of nine judges and three former presidents, is concerned the tax would hit a married couple where one partner earned above a million euros but it would not affect a couple where each earned just under a million euros.

Why does that make it unfair? It seems as though the court is sticking up for the single-earner household — for traditional marriage. Why does fairness require that? I think this is what we here in the United States would call a policy decision, to be left to the legislature. (Yeah, a 75% tax rate is really high, but that's not the legal flaw this court found.)

I would in fact call this a policy decision best left to the legislature, but I also think that as a policy choice it seems unfair to tax a household that has much less income much more than the other. Doesn't that sound super-regressive and to be avoided, whether it's because of marriage or any other reason?

I'm open to being convinced otherwise if I'm thinking about this wrong, though.

I don't know if fairness requires "sticking up for the single-earner household", but it hardly seems fair that such a household would pay at a 75% rate, while a two-earner household with a higher combined income pays at a lower rate.

As institutions of the Fifth Republic go, that court is an Americanized idea that doesn't fit well in its civil law setting. Same in Germany. But those judges seem to read the newspapers more closely than their American counterparts, so that a dramatic switch in time hasn't become necessary (yet) to save them from perdition.

the court said that unrealized gains couldn’t be included in assessing the tax because it ignores the requirement to take into account a payer’s ability to meet his obligations.

This is an important distinction between income and wealth that the Obamaites and scum sucking socialist Occupiers don't seem to be able to comprehend.

Because you own a house that you bought say in Menlo Park for 125,000 many years ago and through the luck of the draw it is now worth 2 million but you haven't really gained anything until you sell the house. If you are taxed on the unrealized gain, then most people might have no other option than to sell their homes and other items that have appreciated in value over the years, such as stocks, jewelry, etc. Is this really good policy? Forcing people to liquidate their lifetime assets? How is this anything productive or anything other than sheer vindictive punishment?

Whenever I debate progressives on taxes, I point out that every time taxes are raised, another portion of our freedom is consumed. Bit by bit. Either by funds taken from me that I now cannot spend as I wish, or funds used to create a new regulation to further strangle me. They look at me with disbelief. I then ask the question: if I tax you at 100%, are you free? At 90%? 80%? Sometimes it sinks in.

DBQ - I don't see that as being much different really than closely held family businesses or farms/ranches under our Estate (i.e. "Death") Tax laws. We were lucky, executing an Estate Freeze maneuver a couple of decades ago, as a result of a tax class I took in Business School. Many families are not so lucky. And, with Death Tax rates scheduled to kick back up significantly next week, this may be a significant problem for many families.

I think that the problem here with that sort of ruling is that 14th Amdt. Equal Protection does not apply to the federal government (mostly - because it has somewhat been bootstrapped by Due Process). So, while the states have to treat everyone somewhat equally, the feds mostly don't.

So, sure, it is unfair that single wage earners might pay a much higher tax rate than if they split it between two spouses, but it is probably a lot more unfair that some people in this country pay over half their income in taxes, and others have an effectively negative federal income tax liability, getting refundable tax credits back, instead of paying any federal income taxes.

A tax on wealth while you are living is even more egregious than the horrific estate [death]tax. At least the heirs and the estate have some time to plan to minimize or even escape the death tax. While you are living and being taxed on unrealized gains, you do have some options (gifting, irrevocable trusts etc the planning that I used to do in my practice) but many people may end up just liquidating.

If the first thing that you liquidate is your stock portfolio, then think of the ramifications on the market when the stocks are dumped. Capital gains at 35% versus a wealth tax at ??% ....decisions decisions.

The unfairness of either a wealth tax or a death tax is patent to all but those liberals who look upon the successful as those who must be punished and look upon the wealthy as the golden geese to be harvested. We know what happens when you kill the goose, don't we.

The libs act like people don't have free will or the ability to structure their lives to avoid over taxation and are surprised every single time when their tax and money grabbing schemes don't pan out. Dopes.

DBQ the democrat-socialist just don't understand the difficulty of paying for groceries with unrealized income.

As you said they can't grasp the difference between wealth and income. Now perhaps a way to drive home the lesson is to apply the unrealized gain tax to public sector employee pensions. Average public sector salary plus accumulate sick days, vacation days, personal days on top of the final year's salary plus overtime @ 70% of the combined figure paid yearly for thirty years. Worth at least $1.3mm in cash needed at the outset to fund it for the time frame. Hit them with a pre-death tax on the gain at the death tax rate.

The French Constitution requires taxes be equally apportioned among all citizens according to their means. The claim of being taxed more heavily than someone of greater means follows naturally from that. Also, France is a community property regime where income earned during marriage is the equal property of both spouses.

I'm sure Stanley Kowalski could explain this decision better. Here in Massachusetts, the state constitution requires that taxes be levied at a uniform rate. It's a failure of the imagination of American conservatism that it hasn't sought such a limit on the federal tax power, either through amendment or interpretation.

Humperdink said...Whenever I debate progressives on taxes, I point out that every time taxes are raised, another portion of our freedom is consumed. Bit by bit. Either by funds taken from me that I now cannot spend as I wish, or funds used to create a new regulation to further strangle me. They look at me with disbelief. I then ask the question: if I tax you at 100%, are you free? At 90%? 80%? Sometimes it sinks in

This can only be established if the other side of the argument understands what 'freedom' means. Virtually all the leftys I talk to understand 'freedom' to mean more government. You're point would be lost on them.

It might be argued that a wealth tax encourages continued productivity. I do not see it as inherently more unfair than income taxes. Income tax makes it harder to get rich. Wealth tax makes it harder to stay rich. Too bad about the home in Menlo Park that you can no longer afford - you will have to move somewhere less awesome.

Oso Negro said...It might be argued that a wealth tax encourages continued productivity. I do not see it as inherently more unfair than income taxes. Income tax makes it harder to get rich. Wealth tax makes it harder to stay rich. Too bad about the home in Menlo Park that you can no longer afford - you will have to move somewhere less awesome.

It is the first state-run pension program for nongovernment employees and may add as much as $6.6 billion to funds managed by the California Public Employees’ Retirement System, the biggest U.S. pension. Calpers, as the fund is known, has assets of $242 billion.

The law is aimed at businesses with five or more employees that don’t offer pensions or 401(k) savings programs. The law requires companies to contribute 3 percent of a worker’s salary to a retirement account. Workers will be enrolled in the program unless they choose to opt out.

Just another way to enrich their buddies in the industry and further damage small businesses. It won't be long before they attempt to seize existing 401K plans and convert them to management by government. And we all know how fabulous government is at managing money.

Without knowing the complete history, I believe the U.S. Constitution prohibits wealth taxes under the "direct tax" language found therein. This doesn't prevent a future Congress from enacting one and having to settle this in the courts. I'm sure out wise Latina justice and others of the liberal ilk would have no problem with such a tax.

Why does that make it unfair? It seems as though the court is sticking up for the single-earner household — for traditional marriage. Why does fairness require that? I think this is what we here in the United States would call a policy decision, to be left to the legislature

Perhaps, unlike the court in the United States, French courts believe they should intervene when the legislature creates policy so potentially fatal to the nation's future. The single earner 'fairness' excuse is as good as any.

"In the United States, anti-tax zealots will try to use the Constitution to cut off debate about a wealth tax before it begins. Article 1, Section 8 grants Congress plenary power to impose any and all "taxes, duties, imposts and excises," but it contains a special limitation on "capitation and other direct taxes." Under this little-known proviso, such taxes may be imposed only if they are apportioned among the states according to their population. This provision was part of a compromise with the slave-holding South, and its intention was to prevent the North from imposing a "head tax" on slaves because this could not be apportioned equally among the population of all the states.

Given its origins, this provision has consistently been construed very narrowly by the Supreme Court, which has found only head taxes and real estate levies to be within its scope. There has been only one exception. In 1895, the court used the clause to declare the income tax unconstitutional, but this judgment was reversed by the 16th Amendment. Given this history, it is extremely unlikely that the justices will cite the founders' original compromise with slavery to bar a tax that would serve the cause of economic equality and democratic legitimacy. The Roberts court may be conservative, but it is not quite as reactionary as all that."

Many people who have unrealized gains in assets aren't exactly "rich" either. For example: My stepmother and father. Bought a home in a now desirable area of California in the early 1960's for 45K. It is now worth, through no actions of their own over 2 million dollars. Fortunately, Prop 13 has prevented them from losing their home through exorbitant property taxes. A wealth tax assessed EVERY YEAR on an asset worth 2 million would break them. They would probably have to sell and move. The taxes on the sale of the house would also break them.

So while they are comfortable and have been fortunate....you want to punish them and force them to lose everything that they have worked for all their lives because the value of something they own has increased through no fault of their own ????

Just owning shit/stuff (thank you George Carlin) doesn't make you "rich" and able to pay huge taxes. THIS is what the French Court understood

It doesn't seem that anyone on the left at any time in the past two hundred years has considered that resentment of the rich can be just as much a prejudice as, say, distrust of foreigners. Marie Antoinette spent a lot of money foolishly, but the cost of all her jewels was a fraction of the price paid for the brass buttons of Napoleon's armies......Wealthy people are exceptionally fortunate, but there's no reason to believe that they are exceptionally evil. Marie Antoinette was formally charged with seducing her five year old son. This doesn't demonstrate the evil of Marie Antoinette but the monstrosity of the hate that was directed against her.

DBQ - I am not advocating against your parents. I would point out that not everyone who makes a high income is "rich" either, depending on their individual circumstances. I do, however, argue that a wealth tax is no more inherently "unfair" than an income tax. I also noticed on Wikipedia that Donald Trump was advocating a one time wealth tax of 14.3% some years ago as a means of settling the national debt back when it was a skimpy 5.3 trillion. These days it would take a heftier assessment.

Most people do not study or understand the word "fair" with regard to taxes.

Apparently, I don't.

Why is it fair for the top 1% to pay 22.3% of federal taxes paid, even though they only made 13.4% of the income?

Why is it fair for the bottom 20% nto pay .3% of federal taxes paid, even though they made 5.1% of the income?

I thought fair was everyone being treated the same?

The bottom four quintiles all have a higher percentage of the nation's income after taxes than they do before...the very definition of a progressive tax rate. When you compare the numbers of 2009 and 2007, you see the tax burden got even more progressive.

Fair means "according to the rules". If the catcher grabs the pop-up before it hits the ground, it's a fair out. The rules say so.

We don't have rules like this in normal life. Is it fair to take away someone's wealth? Real estate taxes do that, and socialism dictates it. Is it fair to make more money than someone doing a similar job? Equal-pay philosophy says no. Is it fair that men can't get serving jobs at Hooter's?

Most people think the courts decide what's fair. They do, too often. What they should decide is what's legal.

Taxes, at some point in my previous life, meant "the amount of funds needed to run the government".

The clowns in DC then discovered they could buy votes with federal funds. From there,tax policy evolved (love the word) into fairness (gag)- robbing Peter to pay Paul's children out of wedlock. We are now facing financially ruin. There is no turning back. The marketplace will be the arbiter .... and the result will not be pleasant.

Involuntary exploitation should be processed uniformly across all economic levels. In order to preserve individual dignity, it is necessary that it be neither progressive nor regressive. It cannot be morally justified to employ the superior coercive power of government -- a minority interest -- to effect redistributive change.

A general rule of thumb to follow in order to mitigate progressive corruption is that involuntary redistribution schemes should "promote the general -- not individual -- Welfare".

It is a dissociation of risk which causes corruption. It is dreams of instant gratification which motivates its progress.

Wll smith, who has called for getting rich people to pay more in taxes was told on French tv about the tax rate in France and was flabbergasted at the 75% tax rate. (He thought it would be 30% or so). So much so that he says at the end "god bless America" jokingly (but not so jokingly).

See what happens Will when govt elides to spend your money to feed the govt programs that you say we need so much. Why not 75% Will? Don't be such a hypocrite.We need to fund the govt, and we need to,do so on the backs of the top 2%. And it would be unpatriotic NOT to pay 75% Will.Tis also reminds me of Rosanne Barr saying:“I first would allow the guilty bankers to pay… back anything over 100 million in personal wealth because I believe in a maximum wage of 100 million dollars and if they’re unable to live on that amount then they should go to the reeducation camps, and if that doesn’t help, then be beheaded.”

Where did she come up with that hundred million figure? How,much do you want to bet that its a hundred million because her net worth is less than a hundred million. Hence, she gets to be the populist out for the little guy and not the fat cat that needs to hae their asset seized.

Actually Rosanne I would set that limit much lower. Whatever her actual me worth is I would argue is 5 million more than than limit that rich people should be able to keep,and not have redistributed.Because really, Rosanne can't live on 3 million dollars Rosanne? you can't live on 1 million dollars? Considering all the govt programs that are underfunded without that money its quite clear where it should go. I'm just speaking of "fairness"

if a teacher earns 40,000 a year she'd have to work 30 years just to break a million. And yet Rosanne, the fat cat gets to live with far more simply because of a tv show she did ten years ago.

75% tax Rate for Hollywood. Seizure of all money over 2 million in net worth of all Hollywood types.

At least bankers lend you money. What does will smith do, other than appear in crappy movies that you have to pay exhorbitantly to see.

When it comes to tax "fairness," it would be sensible to separate "vertical" from "horizontal" fairness concerns.

Vertical fairness deals with progressivity in the tax code---the fact that folks pay a progressively higher tax rate the more they earn.

Horizontal fairness is something entirely different. Its concern is taxing equally situated folks equally, such as the blue-eyed and brown-eyed.

It is my opinion that the greatest tax abuse is that represented by horizontal unfairness. While top earners have the money to pay their exorbitant taxes, those abused by horizontal tax unfairness mostly do not.

Examples of horizontal unfairness are those treating differently those taxpayers who are: